Profit Dip and Sector Bets Challenge Mirrabooka’s Market Positioning
Mirrabooka Investments reports a 26% drop in net profit for FY25 but maintains its fully franked dividend, supported by a significant $85 million capital raise. The fund’s portfolio return lags the benchmark amid sector headwinds, yet long-term performance remains robust.
- Net profit down 26.2% to $7.9 million for year ended June 2025
- Final fully franked dividend held steady at 6.5 cents per share
- Raised $85.1 million through a 1-for-7 rights issue
- Portfolio return of 11.4% trails benchmark return of 15.2%
- Significant cash holding of $82.6 million as of June 30, 2025
Profit Decline Amid Market Volatility
Mirrabooka Investments Limited has reported a net profit attributable to members of $7.9 million for the financial year ended 30 June 2025, marking a 26.2% decline from $10.7 million in the prior year. Revenue from operating activities also fell 6.4% to $11.4 million. The company attributes this dip largely to reduced contributions from its trading and options portfolios, which faced a challenging market environment marked by significant volatility.
Dividend Maintained Despite Earnings Pressure
In a move that underscores its commitment to shareholder returns, Mirrabooka declared a final fully franked dividend of 6.5 cents per share, unchanged from the previous year. Total dividends for FY25 amount to 11.0 cents per share, down from 13.0 cents last year, which included a special dividend. Notably, the entire final dividend is sourced from capital gains, with a substantial LIC capital gain component allowing some shareholders to claim tax deductions.
Capital Raise and Cash Position
The company successfully completed a 1-for-7 non-renounceable rights issue in June 2025, raising $85.1 million in additional capital. This capital injection has bolstered Mirrabooka’s cash reserves, which stood at $82.6 million as of 30 June 2025, representing approximately 11% of the portfolio value. The fund has adopted a patient approach to deploying this capital, reflecting its disciplined investment philosophy.
Portfolio Performance and Sector Exposure
Mirrabooka’s portfolio returned 11.4% for the year, including franking credits, trailing the combined S&P/ASX Mid Cap 50 and Small Ordinaries Accumulation benchmark return of 15.2%. The underperformance is largely attributed to the fund’s underweight positions in the gold sector and highly valued technology stocks, which outperformed the broader market. Key contributors to portfolio gains included Temple & Webster Group, HUB24, and Life360, while significant detractors were IDP Education, OFX Group, and Reece.
Strategic Portfolio Moves and Outlook
During the year, Mirrabooka made notable acquisitions in Treasury Wine Estates and Ramsay Health Care, both facing cyclical challenges but viewed as attractive long-term investments. The fund also divested from several holdings, including PSC Insurance and Dropsuite, following takeovers or valuation considerations. Looking ahead, Mirrabooka emphasizes patience and discipline, leveraging its fixed capital structure to avoid short-term performance pressures and focus on medium to long-term value opportunities.
Bottom Line?
Mirrabooka’s steady dividend and capital raise position it well, but market headwinds and sector exposures will test its resilience in the year ahead.
Questions in the middle?
- How will Mirrabooka deploy its substantial cash reserves amid ongoing market volatility?
- What impact will sector underweights, particularly in gold and technology, have on future returns?
- Will the LIC capital gains component of dividends continue to provide tax advantages for shareholders?
